Exhibit 63
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 78

Multiple Choice

Exhibit 6.3
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { l l r l c } \text { Stock } & \mathbf { R } _ { \text {it } } & \mathbf { R } _ { \text {mt } } & \mathbf { a } _ { \mathbf { i } } & \text { Beta } \\\hline \text { Elliot } & 9.9 & 15.0 & 0 & 0.8 \\\text { Hemlick } & 9.1 & 8.0 & 0 & 1.1\end{array}$$ R_it = return for stock i during period t
R_mt = return for the aggregate market during period t
-Refer to Exhibit 6.3. What is the abnormal rate of return for Elliot during period t using only the aggregate market return (ignore differential systematic risk) ?

• A)1.50
• B)1.10
• C)-1.50
• D)-5.10
• E)-8.00

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Definitions:

Monopolistically Competitive

A market structure where many companies sell products that are similar but not identical, allowing for competition based on factors other than price, such as quality and branding.

Profit-Maximizing

The process or strategy of adjusting production and sale operations to achieve the highest possible profit.

Short Run

A period in which the quantity of at least one input is fixed and the quantities of the other inputs can be varied.

Product Differentiation

A marketing strategy that businesses use to distinguish their products from those of competitors through design, features, and branding.